The limited scope of interference under Section 34 of the A&C Act, 1996 and the arbitrator's authority in interpreting the contract terms.

JUDGMENT

Sachin Datta, J.

O.M.P. (COMM) 93/2021

1. The present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (the "A&C Act") is directed against the award dated 20.11.2020 (the "impugned award"). The petitioner herein was the respondent in the arbitration proceedings whereas the respondent herein was the claimant.

FACTUAL BACKGROUND

2. The disputes between the parties arose in the context of a Collaboration Agreement dated 07.11.2011. The subject matter of the Collaboration Agreement was a land (plot) admeasuring 1148 Sq. Yards, situated in Ishwar Nagar, Mathura Road, New Delhi.

3. Vide the said Collaboration Agreement/MoU (the "said agreement"), it was agreed that the respondent/claimant, in addition to bearing the cost of construction/development of the aforesaid plot, would pay a sum of Rs. 5.2 crores to the petitioner (the owner of the plot). A sum of Rs. 50 Lakhs was paid at the time of signing of the said agreement, followed by further payment/s, as noticed in the impugned award, as under:

"(a) A sum of Rs.1.50 Crore (Rupees One Crore Fifty Lakh) when the Owner gets the building plans sanctioned/approved from the concerned department and Owner was to execute registered Special Power of Attorney in favour of the Claimant (Builder) before the concerned authority and the Respondent (Owner) was to handover vacant physical possession of the property to the Builder for the purposes of constructing the building - Cl. 7 read with Cl.(V-c) and Cl.(V-e);

(b) Further sum of Rs.3.20 Crore (Rupees Three Crore Twenty Lakh) was to be paid by the Claimant (Builder) to the Respondent (Owner) in four equal installments within 120 days, from the date of intimation of approval/sanction of the building plans by the Respondent to the Claimant. The Agreement also provided that if the Claimant fails to pay the above amount to the Respondent within the said time of 120 days, the Claimant would get one month's grace period, subject to penalty of Rs.25 lakh and thereafter, the Respondent was entitled to rescind the Agreement and the possession of the Property/Plot could be taken back by it. The Agreement also provides that after rescinding the Agreement, the Respondent shall return the total amount already paid by the Claimant (Builder) to the Respondent (Owner) Cl.-(V-d)."

4. It was the case of the respondent/claimant in arbitration that the petitioner/owner never sent any intimation about the approval/sanction of the building plans and was able to prolong the sanctioning of the plan on one pretext or the other. Ultimately, the respondent/claimant sent a registered letter to the petitioner/owner dated 07.03.2013 inquiring about the status of sanction of the building plans. Subsequently, in a communication dated 22.03.2014 sent on behalf of the petitioner/owner, it was contended that the respondent/claimant was to provide document/s to enable the petitioner to verify its credentials, financial status and their ability to execute the project. The said letter sought to terminate the agreement dated 07.11.2011 for non-supply of the said documents. It was contended by the respondent/claimant that alongwith the said letter, the petitioner/owner also sent a photocopy of a cheque of Rs. 50 Lakhs towards return of the amount received at the time of the signing of the said agreement. On the other hand, the petitioner/owner's case was that it had sent a cheque of Rs. 50 lakhs in favour of the respondent/claimant but it was deliberately not encashed.

5. Vide communication dated 02.07.2014, the respondent/claimant reiterated that it was always ready and willing to fulfil its obligations under the said Collaboration Agreement dated 07.11.2011. It was further stated as under:

".................

Please note that we have been ready with the money at all times and we are still ready and willing to pay you the money in terms of the collaboration agreement provided you hand over the possession of the property and also the sanctioned plan of t